Snapshot 2014 - World Bank

1 Snapshot 2014 June 20, 2014 The World bank _____ This Snapshot was prepared by a team comprising Alexandria Valerio, Maria Laura Sanchez Puerta, G elle Pierre, Tania Rajadel, and Sebastian Monroy Taborda. The team appreciates the leadership and technical support provided by Arup Banerji, Anush Bezhanyan, Elizabeth King, Harry Patrinos, and David Robalino. Helpful peer review comments were received from Omar Arias, Christian Bodewig and Pablo Acosta. Ariel Fiszbein (former Human Development Chief Economist) provided invaluable and sustained technical support since the early stages of the STEP Skills Measurement program.

2 World bank regional teams were led by Meskerem Mulatu (Armenia, Azerbaijan and Georgia), Ana Maria Oviedo (Bolivia) Pablo Acosta (Bolivia and Colombia), Peter Darvas (Ghana), Helen Craig (Kenya), Ximena del Carpio (Lao PDR), Johannes Koettl and Indhira Santos (Macedonia and Ukraine), Halil Dundar (Sri Lanka), Christian Bodewig (Vietnam) and Xiaoyan Liang (Yunnan Province, China). The STEP Skills measurement program has benefited from the Technical Cooperation established with Irwin Kirsch, Claudia Tamassia, Ann Kennedy, Mary Lou Lennon, Kentaro Yamamoto and Eugenio Gonzalez (Education Testing Services) and Andreas Schleicher, William Thorn, Marta Encinas-Martin, Mark Keese and Glenda Quintini (OECD).

3 The program received technical support from Angela Duckworth (University of Pennsylvania), Nancy Guerra (University of Delaware), Michael Handel (Northeastern University) and Marguerite Clarke ( World bank ). Financial support to implement the STEP skills measurement surveys was received from the bank Netherlands Partnership Program (BNPP), the Multi Donor Trust Fund for labor Markets, Job Creation and economic Growth (MDTF) and the Russia Education Aid for Development (READ) Trust Fund. 2 The World bank s key development objectives are reducing extreme poverty and increasing shared prosperity.

4 This calls for raising living standards for all, reducing inequality, and improving other aspects of individual well-being and social inclusion. Achieving these objectives requires improving access to high quality services, developing well educated workers for the 21st century, increasing the number of high-skilled jobs, and reducing skill mismatches between workers and jobs. While information on the technology intensity of jobs and mismatches in the labor market may be found in labor force and enterprise surveys, it is important to define what it means to be a well-educated worker in the 21st century.

5 Education in the modern economy In order to determine what it means to be a well-educated worker in the 21st century, it is necessary to reflect on the impact that swift changes in technology and the organization of production in a global economy are having on the labor market and on the nature of jobs. There is a robust body of evidence showing that technology has shifted the focus from the qualifications needed for doing a life-time job to the skills needed to do specific tasks in jobs that are constantly changing.

6 This means that more than ever a person has to be equipped with a solid foundation of multiple generic skills that enable further acquisition of job-specific (technical) skills and adaptation to repeated employment changes over the work life (Holzer, 2011; Acemoglu and Autor, 2010; Autor, Katz and Kearney, 2006; Autor, Levy, and Murnane, 2003). However, the education (basic and post-secondary) and training systems do not currently focus enough on the development of these skills and often lag in responding flexibly to changes in skills demand.

7 As education coverage has expanded rapidly across many countries, it has done so with varying quality. Basic educational attainment is becoming more of a norm and years of schooling no longer carry the same signal of the actual skills embodied in individuals (Arias et al., 2014 ; OECD, 2013; Sondergaard and Murthi, 2012). Standard research indicators and their limitations Standard research indicators such as educational attainment, employment and unemployment, occupation and industry, earnings, and hours worked are staples of policy and research and as such are usually available in labor force surveys.

8 The indicators have some significant limitations. For example, they do not give any clear indication of the level of skill actually required by current or future jobs. They give no indication of why a particular level of education might be needed for certain kinds of jobs, what relationship it has to the technology associated with a job, or even what that level might be. They do not measure any mismatch between skill stocks and job skill requirements or the degree to which the skills of workers and jobs are meeting or approaching national goals.

9 Standard indicators also fail to address the relative weight of cognitive and socio-emotional characteristics. In general, the level of detail in standard indicators is thin and leaves many questions unanswered regarding workforce skill characteristics, job skill requirements, quality of worker-job matches, working conditions, and job rewards other than earnings. The resulting information gaps prevent policymakers from making informed and timely decisions on education and training. On measuring skills Given the need to understand the role that skills play on employability, employment, and as productivity boosters, information on skills use and skill proficiency level is required.

10 Sources of information that provide internationally comparable indicators on skill proficiency include the Programme for International Student Assessment (PISA) which measures generic skills (reading, mathematics, and Measuring Skills for Employment and Productivity What does it mean to be a well-educated worker in the modern economy? 3 science) and knowledge of 15-year-olds globally and can be considered as a barometer of skill proficiency for new entrants to the labor force. Similarly, the Programme for the International Assessment of Adult Competencies (PIAAC), which focuses primarily on OECD countries--directly measures cognitive skills (literacy, reading components, numeracy and problem solving in technology- rich environments) and the utilization of skills in different contexts.